In no more than 4 slides you should be able to describe how YOUR industry (you and your competitors) are having a negative impact on your customer's bottom-line. If you can do this instead of the typical "Background of Our Company" and "Background of Our Products" they will be eager to hear what yo have to say next instead of being half asleep.

During this part of the presentation I like to generate conversation if there is an opportunity. This is nice because often there are people in the room (we will discuss who should be in the room later) who are not fully aware of these situations or the order of magnitude of them. For example (continuing for the Part 2 example) I may ask if in fact they have the experience of having to hold higher inventories due to a supplier's policy and if despite the fact that they have too much of some inventory do they stock out or almost stock out of others. I'm hoping to hear a story about a time when they ended up having to dump a bunch of inventory and also one about what happened when the stocked out.

Once we have our customer's head shaking in agreement and they have shared a couple stories, they are actually eager to hear what you have to say next. You are the first vendor that has so eloquently described the dynamic between industry practices and you verbalized it better than even they have or could.

Sunday, September 16, 2007

In Part 1 we discussed some background on "framing" and the importance of how you present an offer. So now we are going to apply that to presenting a Theory of Constraints (TOC) Mafia Offer.

During a Mafia Offer Boot Camp we create either a PowerPoint presentation (called a Solutions for Sales presentation) with your offer and/or what we call a 1 Pager. In both cases we follow the same framing.

Agree on the problem.

Agree on the direction of the solution.

Agree that our solution solves the problem.

The above is part of the Theory of Constraints buy-in process. Notice the resemblance to what was presented in Part 1 regarding Ludwig von Mises' three requirements for an individual to change:

The individual must be dissatisfied with the current state of affairs.

They must see a better state.

They must believe that they can reach that better state.

Let's look at each step in some detail.

1. Agreeing on the Problem.

In the PowerPoint presentation we start with "Analysis of the Supplier's Practices". In this part of the presentation we show how suppliers in our industry (us and our competitors) have a negative impact on our customer's business. These negative effects are due to our practices. Typically these practices are common across our industry and include minimum order requirements, scheduling practices, lead-times, and so on. In this way we are starting with how OUR practices are the cause for at least some of their problems.

Here's an example:Supplier Practice: Minimum Order Quantities and Volume DiscountsCustomer's Mode of Behavior: Batch orders (delay ordering) to accumulate needs and order larger quantities than immediate needs require to get the discount.Implications on Customer's Business: High inventory with all the cost and risk that goes with it.

Here's another:Supplier Practice: Charge based on time or by project.Customer's Mode of Behavior: Slow decision process (check references, etc.) to be sure that promised benefits will be actualized.Implications on Customer's Business: Promised benefits are not always realized or if they are, they were delayed.

When you do the typical sales call -- show up and throw up spouting all the features and benefits of your product or service, the customer is automatically resisting and looking for reasons not to buy. By starting with how WE negatively impact them, customers are more open to hear what we have to say next.

I typically like to generate discussion around these problems because often times there are people in the room that were not aware of the situation or the magnitude of the problem.

In the 1 Pager we start similarly but we have an opening sentence or two to explain the problem(s). We would start with something like:

Widget suppliers typically require their customers to order minimum quantities and give further incentives to place even bigger orders because that's what's best for them. Have you followed the rules? Have a small mountain of inventory? But still stock out? Is doing what's best for us, not as good for you?

Sunday, September 9, 2007

a men’s health magazine with the cover, “Lose Your Gut Fast” ora similar magazine with the cover, “Get Six Pack Abs”?

One study showed that over 80% of men chose the first cover – “Lose Your Gut Fast.” Why?People are more interested in avoiding (or reducing) pain than they are in increasing pleasure.

The Austrian economist, Ludwig von Mises, once said that three requirements must be present for an individual to change:

The individual must be dissatisfied with the current state of affairs.

They must see a better state.

They must believe that they can reach that better state.

That last point is critical as it relates to the “gut” issue. When someone is 20 pounds overweight, as many Americans are, six pack abs may be desirable but seem inconceivable. I sometimes joke that I would be happy with a “two-pack.” Only when your gut is gone will the idea of six pack abs seem like a possibility.

Saturday, September 1, 2007

I would like your feedback on which topic you would like me to address next, here are the options I’m considering:

Theory of Constraints on Incentive Plans

Most Common Issues when Implementing DBR (Drum-Buffer-Rope)

Theory of Constraints on Sales Commissions

As a thank you for replying you can purchase Achieving a Viable Vision for 50% off. Just send me an email and let me know your vote and if you want to purchase the 3 hour audio plus workbook (recorded from a live workshop) for only $99 with free shipping worldwide.